ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, C.

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1 Court File No.: CV CL ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, C. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF URBANCORP CUMBERLAND 2 GP INC., URBANCORP CUMBERLAND 2 L.P., BOSVEST INC., EDGE ON TRIANGLE PARK INC., AND EDGE RESIDENTIAL INC. FACTUM OF THE APPLICANTS (Returnable October 6, 2016) October 4, 2016 BENNETT JONES LLP 3400 One First Canadian Place Toronto, ON M5X 1A4 Fax: S. Richard Orzy (LSUC#: 23181I) Tel: Raj Sahni (LSUC#: 42942U) Tel: Lawyers for the Cumberland Group

2 2 SERVICE LIST WEIRFOULDS LLP Barristers & Solicitors The TD Bank Tower, Suite Wellington Street West, Toronto, ON M5K 1B7 Edmond E.B. Lamek Tel: DENTONS CANADA LLP 77 King Street West #400, Toronto, ON M5K OA1 Neil S. Rabinovitch Tel: Lawyers for Reznik, Paz, Nevo Trustees Ltd., in its capacity as the Trustee for the Danny M. Nunes Debenture Holders (Series A) and Adv. Guy Tel: Gissin, in his capacity as the Israeli of Urbancorp. Inc. Lawyers for the Urbancorp CCAA Entities THE FULLER LANDAU GROUP INC. 151 Bloor Street West, 12th Floor Toronto, ON M5S 1S4 Gary Abrahamson Tel: Fax: Adam Erlich Tel: Fax: AErlichgFullerLLP.com The Proposal Trustee and proposed Monitor GOLDMAN SLOAN NASH & HABER (GSNH) LLP 480 University Avenue, Suite 1600 Toronto, ON M5G 1V2 Mario Forte Tel: Fax: forteagsnh.com Robert J. Drake Tel: Fax: Lawyers for the Proposal Trustee and proposed Monitor

3 3 BENNETT JONES LLP CHAITONS LLP 3400 One First Canadian Place 5000 Yonge Street, 10th Floor P.O. Box 130 Toronto, ON M2N 7E9 Toronto, ON M5X 1A4 Harvey Chaiton S. Richard Orzy Tel: Tel: Lawyers for BMO Raj Sahni Tel: Jonathan G. Bell Tel : Belli a,bennettjones.com. Lawyers for the Cumberland Group and Alan Saskin TORYS LLP ROBINS APPLEBY LLP 79 Wellington Street West, 30th Floor 120 Adelaide Street West, Suite 2600 Box 270, TD South Tower Toronto, ON M5H 1T1 Toronto, ON M5K 1N2 Leor Margulies Scott A. Bomhof Tel: Tel: Imargulies@robapp.com sbomhof a)tor s com Dominique Michaud Lawyers for First Capital Realty Tel: dmichaud@robapp.com Lawyers for Terra Firma Capital Corporation

4 4 BANK OF MONTREAL First Canadian Place 18th Floor, 100 King Street West Toronto ON M5X 1A1 Greg Fedoryn Tel: greg.fedoryn bmo.com Eden Orbach GOWLING WLG (CANADA) LLP 1 First Canadian Place, 100 King Street West Suite 1600 Toronto, Ontario M5X 1G5 Clifton Prophet Tel: clifton.prophet@gowlingw1g.com Lilly Wong Tel: lilly.wong@gowlingwig.com Lawyers for CIBC and CIBC Mortgage Inc. DEPARTMENT OF JUSTICE Ontario Regional Office The Exchange Tower, Box King Street West Toronto, ON M5X 1K6 Fozia Chaudary Tel: fozia.ch.audary@justice.gc.ca MINISTRY OF FINANCE 777 Bay Street, 11th Floor Toronto, ON M5G 2C8 Kevin O'Hara Tel: kevin.ohara@ontario.ca Lawyers for the Ministry of Finance Lawyers for the Department of Justice TORYS LLP 79 Wellington Street West, 30th Floor Box 270, TD South Tower Toronto, ON M5K 1N2 HARRIS SHEAFFER LLP Yonge Corporate Centre 4100 Yonge Street, Suite 610 Toronto, ON M2P 2B5 Adam M. Slavens Barry Rotenberg Tel: Tel: aslavens@torys.com. brotenbergaharris-sheaffer.com Lawyers for Tarion Warranty Corporation

5 5 ROSENSTEIN LAW P.C Yonge Street, Suite 1300 Toronto, ON M2N 6P4 Jonathan Rosenstein Tel: irosenstein a,rosensteinlaw.ca Lawyers for Aviva Insurance Company of Canada MILLER WASTE SOLUTIONS GROUP INC. 73 Brydon Drive Toronto, ON M9W 4N3 Jason Tower Rob Spinopoli FIRM CAPITAL MORTGAGE FUND INC. 163 Cartwright Ave. Toronto, ON M6A 1V5 Fax: MVL LEASING LIMITED 1064 South Service Rd. E. Oakville, ON L6J 2X7 Fax: MVL FINANCIAL SERVICES LIMITED 1064 South Service Rd. E. Oakville, ON L6J 2X7 Fax: CANADIAN IMPERIAL BANK OF COMMERCE 595 Bay Street, 56 Floor Toronto, ON M5G 2C2 CANADIAN MORTGAGE SERVICING CORPORATION 20 Adelaide Street E., Suite 900 Toronto, ON M5C 2T6 Fax: TEPLITSKY, COLSON LLP Barristers 70 Bond Street, Suite 200 James M. Wortzman Catherine Allen Tel: Lawyers for Atrium Mortgage Investment Corporation

6 6 LAURENTIAN BANK OF CANADA 1981, ay. McGill College, bur, 1675 Montreal (Quebec) H3A 3K3 Alexandre LeBlanc Tel: x alexandre.leblanc2@banquelaurentienne.ca BANK OF MONTREAL, AS ADMINISTRATIVE AGENT First Canadian Place, 11th Floor Toronto, ON M5X 1A1 HENDRICK AND MAIN DEVELOPMENTS INC. 85 Hanna Ave., Suite 400 Toronto, ON M6K 3S3 Tel: Fax: FIRST CAPITAL 1071 CORPORATION 85 Hannah Ave., Suite 400 Toronto, ON M6K 3S3 Tel: Fax: LOOPSTRA NIXON LLP 135 Queens Plate Drive, Suite 600 Toronto, ON M9W 6V7 Michael McWilliams Tel: mmcwilliams@loonix.com Lawyers for Ontario Limited carrying on business as Canadian Rental Centres TORKIN MANES LLP 151 Yonge Street, Suite 1500 Toronto, ON M5C 2W7 Kayla Kwinter Tel: kkwinter@torkinmanes.com Lawyers for MDF Mechanical Limited DICKINSON WRIGHT LLP 199 Bay St., Suite 2200 Toronto, ON M5L 1G4 David P. Preger Tel: dpreger@dickinsonwright.com CITY OF TORONTO Legal Services 55 John Street, 26th Floor Toronto, ON M5V 3C6 Christopher P. Henderson chender3@toronto.ca Lawyers for Downing Street Financial Inc.

7 7 FINE & DEO 3100 Steeles Ave. W, Suite 300 Vaughan, ON L4K 3R1 Tel: Fax: Lawyers for Toronto Standard Condominium Corporation No LEVINE SHERKIN BOUSSIDAN 23 Lesmill Road, #300 Toronto, ON M3B 3P6 Kevin Sherkin Tel: Lawyers for Dolvin Mechanical Contractors Ltd. TERRA FIRMA CAPITAL CORPORATION 22 St. Clair Avenue East, Suite 200 Toronto, ON M4T 2S5 Glenn Watchorn President FIRST CAPITAL (S.C.) CORPORATION 85 Hannah Ave., Suite 400 Toronto, ON M6K 3S3 Tel: Fax: FIRST CAPITAL REALTY INC. 85 Hannah Ave., Suite 400 Toronto, ON M6K 3S3 Tel: Fax: TERRA FIRMA CAPITAL CORPORATION 5000 Yonge Street, Suite 1502 Toronto, ON M2N 7E9 Glenn Watchorn President TERRA FIRMA CAPITAL CORPORATION 1 Toronto Street, Suite 700 Toronto, ON M5C 2V6 Glenn Watchorn President gwatchorn Ofcc.ca TERRA FIRMA REALTY CORPORATION 1 Toronto Street, Suite 700 Toronto, ON M5C 2V6 Glenn Watchorn President gwatehorn@tfcc.ea

8 8 GOODMANS LLP Bay Adelaide Centre 333 Bay Street, Suite 3400 Toronto, ON M5H 2S7 Mark Dunn Tel: Lawyers for Toronto Media Arts Cluster MILLER THOMSON Columbia Way Markham, ON L3R 0C9 Cara Shamess Tel: Lawyers for Mid-Northern McMILLAN LLP Brookfield Place, Suite Bay Street Toronto, ON M5J 2T3 Paul Avis Tel: paul.avis gmcmillan.ca Lawyers for RBC and BNS OFFICE OF THE SUPERINTENDENT OF BANKRUPTCY 25 St. Clair Avenue E, 6th Floor Toronto, ON M4T 1M2 Julie Fay Senior Bankruptcy Analyst Tel: Fax: BLAKE, CASSELS & GRAYDON LLP 199 Bay Street, Suite 4000 Commerce Court West Toronto ON M5L 1A9 Steven J. Weisz Tel: Lawyers for Laurentian Bank of Canada DRUDI ALEXIOU KUCHAR LLP 7050 Weston Rd. Suite 610 Vaughan, ON L4L 8G7 Marco Drudi Tel: Lawyers for Paramount Structures Ltd.

9 9 TORYS LLP 79 Wellington Street W. Suite 3000 Toronto, ON M5K 1N2 Scott Bomhof Tel: Crawford Smith Tel: Lawyers for First Captial (King Liberty Retail) Corporation, King Liberty North Corporation, and First Capital (S. C.) Corporation A. FARBER & PARTNERS INC. 150 York Street, Suite 1600, Toronto, ON, M5H 3S5 Hylton Levy, CPA, CA, CIRP, LIT Tel: hlevy!,farberfmancial.com Financial Advisor for Adv. Guy Gissin, in his capacity as the Israeli Functionary of Urbancorp. Inc. ALVAREZ & MARSAL CANADA INC. 200 Bay Street, Suite 2900 Toronto, ON M5J 2J1 Tony Zaspalis Tel: Amanda Favot Tel: Ryan Gruneir Tel: Construction Receiver over Urbancorp (Leslieville) Developments Inc., Urbancorp (The Beach) Developments Inc., and Urbancorp (Riverdale) Developments Inc. DELZOTTO ZORZI LLP 4810 Dufferin Street, Suite D Toronto, ON M3H 5S8 Robert W. Calderwood Tel.: rcalderwood@dzlaw.com Sabrina Adamski Tel.: sadamski@dzlaw.com Lawyers for Furkin Construction Inc. and GMF Consulting Inc.

10 CASSELS BROCK & BLACKWELL LLP 40 King St. West, Suite 2100 Toronto, ON M5H 3C2 Attention: Mark St. Cyr Mark St. Cry Tel: mstcyr@casselsbrock.com DAVAD INVESTMENTS INC. 1131A Leslie Street, Suite 500, Toronto, Ontario, M3C 3L8 David Walerstein David@gatewayproperties.ca DIP Lender Lawyers for Case Realty FASKEN MARTINEAU DUMOULIN LLP 333 Bay Street, Suite 2400 Toronto, ON M5H 2T6 Nora Kharouba Tel: nkharouba@fasken.com Lawyers for HomeLife Landmark Realty Inc.

11 Court File No.: CV CL ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, C. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF URBANCORP CUMBERLAND 2 GP INC., URBANCORP CUMBERLAND 2 L.P., BOSVEST INC., EDGE ON TRIANGLE PARK INC., AND EDGE RESIDENTIAL INC. FACTUM OF THE APPLICANTS (Returnable October 6, 2016) PART I - INTRODUCTION 1. The Applicants, Urbancorp Cumberland 2 GP Inc. ("Cumberland 2 GP"), Urbancorp Cumberland 2 L.P. ("Cumberland 2 LP"), Bosvest Inc. ("Bosvest"), Edge Residential Inc. ("Residential") and Edge on Triangle Park Inc. ("Triangle" and together with Cumberland 2 GP, Cumberland 2 LP, Bosvest, and Residential, the "Cumberland Group") are seeking relief under the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (the "CCAA"). 2. The Cumberland Group are all indirect subsidiaries of Urbancorp Inc. ("UCI"), engaged in the construction of residential projects in the greater Toronto area. 3. Each of the Applicants have filed Notices of Intention to Make a Proposal (each an "NOV) under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the "BIA"). The Fuller Landau Group Inc. ("Fuller Landau") was appointed as the proposal trustee (the "Proposal Trustee") of the Cumberland Group. The stay of proceedings under the NOIs expires on October 10, 2016.

12 2 4. At this time, a broad court-supervised restructuring of the Cumberland Group as a whole is required in order to preserve the most value for stakeholders and complete the Sales Process (defined below). Accordingly, the Applicants are applying for an Order, among other things, (a) (b) (c) (d) (e) (f) (g) taking up and continuing the proposal proceedings of the Cumberland Group under the CCAA, and declaring that the BIA proposal provisions shall have no further application to the Cumberland Group; granting an Initial Order under the CCAA, in respect of the Cumberland Group; appointing Fuller Landau as Monitor (the "Monitor") with "enhanced" powers as set out in the Initial Order; authorizing the Cumberland Group, at the direction of the Monitor, to borrow under the debtor-in-possession facility ("DIP Facility") from Davad Investments Inc, ("Davad" or the "DIP Lender") on the terms and subject to the conditions set out in the commitment letter dated July 15, 2016, and subject to the Order of Honourable Mr. Justice Hainey dated August 24, 2016, and continuing such DIP Facility in the Cumberland Group's CCAA proceeding (the "CCAA Proceeding"); declaring that the Co-Operation Protocol between the Proposal Trustee and the Israeli Parentco Officer approved in the proposal proceedings of the Cumberland Group will continue to apply in the CCAA Proceeding as between the Monitor and the Israeli Parentco Officer; approving the sales process (the "Sales Process"), as described in the Third Report of Fuller Landau and approved by the Order of Honourable Mr. Justice Hainey dated August 24, 2016, be taken up and continued in the CCAA Proceeding, including the entitlement of Fuller Landau to execute and deliver the vesting certificates contemplated in the Vesting Order of Honourable Mr. Justice Hainey dated August 24, 2016; authorizing the Monitor to conduct, supervise and direct the Sales Process; and

13 3 (h) approving the Administrative Charge and the Directors' Charge, and continuing in the CCAA Proceeding the DIP Lender's Charge granted by the August 24th Order. PART II - THE FACTS 5. The facts with respect to the Applicants are more fully set out in the Affidavit of Alan Saskin, sworn September 30, 2016 (the "Saskin Affidavit"). A. BACKGROUND 6. UCI is a real estate development company that has developed, constructed, and sold numerous residential projects. UCI is the 100% shareholder of Cumberland 2 GP, which in turn is the general partner of Cumberland 2 LP. Cumberland 2 LP is the sole shareholder and beneficial owner of the assets of Bosvest and an indirect shareholder of Residential and Triangle. The Affidavit of Alan Saskin, Application Record, Tab 2 (the "Saskin Affidavit"), at paras On April 29, 2016, each of Bosvest, Residential and Triangle (collectively, the "Edge Companies") filed NOIs with the Office of the Superintendent of Bankruptcy Canada. Fuller Landau was named as proposal trustee under those NOIs. Saskin Affidavit, at para On May 18, 2016, the Ontario Superior Court of Justice (Commercial List) (the "Court") issued the following Orders in respect of UCI and certain of its subsidiaries, excluding the Cumberland Group: (a) an Initial Recognition Order (Foreign Main Proceeding), recognizing proceedings (the "Israeli Proceedings") commenced in the District Court of Tel Aviv-Yafo, Israel (the "Israeli Court") on April 25, 2016 as the foreign main proceeding in respect of UCI pursuant to Part IV of the CCAA and recognizing Guy Gissin, the Functionary Officer and foreign representative of UCI appointed by the Israeli Court;

14 4 (b) (c) a Supplemental Order (Foreign Main Proceeding), which inter alia, appointed KSV Kofman Inc. ("KSV") as the "Information Officer" of the Court in respect of the Israeli Proceedings and set out the powers of the Information Officer; and an Initial Order pursuant to the CCAA in respect of most of the direct and indirect subsidiaries of UCI (the "UCI CCAA Companies"), but not including any of the entities in the Cumberland Group. Pursuant to that CCAA Initial Order, KSV was appointed as monitor in respect of the UCI CCAA Companies with enhanced powers to oversee and manage the business and operations of the UCI CCAA Companies, and a protocol was approved for cooperation between KSV and the Israeli Functionary. Saskin Affidavit, at para The Applicants were not debtors in either the UCI CCAA Companies' proceedings under the CCAA or the Israeli Proceedings. The NOI proceedings in respect of the Cumberland Group were kept separate from the CCAA proceedings in respect of UCI's other subsidiaries as the Cumberland Group is dealing primarily with claims of direct trade creditors and construction lien claimants as opposed to the Israeli bondholder claims and other claims being dealt with by UCI and the UCI CCAA Companies. Saskin Affidavit, at para On May 20, 2016, each of Cumberland 2 LP and Cumberland 2 GP (collectively, the "Cumberland 2 Companies") filed NOIs, naming Fuller Landau as proposal trustee. Saskin Affidavit, at para On May 26, 2016, the Court granted an Order (the "May 26th Order"), among other things: (a) administratively consolidating the proposal proceedings of Bosvest, Residential and Triangle under one joint title of proceedings and one estate and court file number: ;

15 5 (b) (c) (d) granting an Administrative Charge in favour of Fuller Landau, counsel to Fuller Landau, and counsel for Bosvest, Residential and Triangle; authorizing Fuller Landau to open and manage bank accounts for Bosvest, Residential and Triangle; and extending the time within which a proposal must be filed by Bosvest, Residential and Triangle with the Official Receiver to and including July 12, Saskin Affidavit, at para On June 15, 2016, the Court granted an Order (the "June 15th Order"), among other things, (a) (b) (c) administratively consolidating the proposal proceedings of the Edge Companies and the Cumberland 2 Companies; ordering that the Administrative Charge extends to the Property of the Cumberland 2 Companies; approving the "Protocol for Co-Operation Among Canadian Court Officer and Israeli Functionary" dated June 8, 2016 (the "Co-operation Protocol"); (d) granting certain additional powers to Fuller Landau with respect to the Edge Companies and their property, to assist in the management and administration thereof; (e) directing Harris Sheaffer LLP to release approximately $2.7 million, held in its trust accounts relating to realty taxes owed to the City of Toronto, to Fuller Landau; and (f) extending the time for filing a proposal by the Cumberland 2 Companies until July 12, Saskin Affidavit, at para. 14.

16 6 13. On July 11, 2016, the Court granted an Order (the "July llth Order") extending the time for filing a proposal by the Cumberland Group until August 26, Saskin Affidavit, at para On August 24, 2016, the Court granted an Order (the "August 24th Order"), among other things, (a) (b) (c) (d) (e) (f) approving the Sales Process, including the engagement of Brad J. Lamb Realty Inc. ("BL") as listing agent under the Sales Process and granting a prospective vesting order in respect of certain sales contemplated therein; approving the DIP Facility from Davad; approving the DIP Lender's Charge; approving the activities of Fuller Landau; approving the fees and disbursements of Fuller Landau and its counsel; and extending the time for the Cumberland Group to file a proposal pursuant to section 50.4(9) of the BIA to and including October 10, Saskin Affidavit, at para Also on August 24, 2016, the Court issued an Approval and Vesting Order (the "Vesting Order") in respect of the sale of one or more Vacant Units (as defined in the Vesting Order). Saskin Affidavit, at para After a comprehensive review of the current operations of the Cumberland Group with Fuller Landau as Proposal Trustee, it was concluded that a broad court-supervised restructuring of the Cumberland Group as a whole under the CCAA is required in order to preserve the most value for stakeholders and to complete the Sales Process. Saskin Affidavit, at para. 18.

17 7 PART III - LAW AND ARGUMENT A. CONTINUATION UNDER CCAA 1. BIA Part III proceedings can be taken up under the CCAA. 17. Section 11.6(a) of the CCAA provides as follows: 11,6 Notwithstanding the Bankruptcy and Insolvency Act, (a) proceedings commenced under Part III of the Bankruptcy and Insolvency Act may be taken up and continued under this Act only if a proposal within the meaning of the Bankruptcy and Insolvency Act has not been filed under that Part; and 18. Pursuant to Section 11.6 of the CCAA, proceedings commenced under Part III of the BIA may be taken up and continued under the CCAA. On a motion to continue under the CCAA, an applicant should place before the court, among other things, evidence that there has been statutory compliance with Section 11.6(a) of the CCAA. Re Clothing for Modern Times La (2011), 88 C.BR leth ) 329 (Ont. S.C.J. [Commercial List]) [Re Clothing] at para. 9, Applicants' Book of Authorities, Tab "1". 19. Bosvest, Residential and Triangle filed NOIs on April 29, Similarly, Cumberland 2 LP and Cumberland 2 GP filed NOIs on May 20, No proposal has been filed with respect to any of the entities comprising the Cumberland Group. Accordingly, the NOI proceedings commenced in respect of Cumberland 2 GP, Cumberland 2 LP, Bosvest, Residential and Triangle, satisfy the requirements under Section 11.6(a) of the CCAA for continuation under the CCAA. Saskin Affidavit, at paras, 9 & The proposed continuation is consistent with the purpose of the CCAA. 20. As established in Re Clothing, on a motion to continue under the CCAA the Applicants should also place before the Court evidence that the proposed continuation would be consistent with the purposes of the CCAA. Re Clothing, at para. 9.

18 8 21. In Ted Leroy Trucking Ltd, Re, the Supreme Court of Canada articulated the purpose of the CCAA in several ways: (a) (b) To permit the debtor to continue to carry on business and, where possible, avoid the social and economic costs of liquidating its assets; To provide a means whereby the devastating social and economic effects of bankruptcy or creditor initiated termination of ongoing business operations can be avoided while a court-supervised attempt to reorganize the financial affairs of the debtor company is made; (c) (d) To avoid the social and economic losses resulting from liquidation of an insolvent company; To create conditions for preserving the status quo while attempts are made to find common ground amongst stakeholders for a reorganization that is fair to all. Re Ted Leroy Trucking [Century Services] Ltd., 2010 SCC 60, Applicants' Book of Authorities, Tab "2", Re Clothing, at para In Re Clothing, the Court was satisfied that the purposes of the CCAA would be met even though the reorganization involved the sale of the company as a going concern. The Court held that continuation under the CCAA to enable a going-concern sale would be consistent for the purposes of the CCAA as such sale likely would maximize the recovery for the remaining secured creditors, preserve employment for some employees, and provide a tenant to the landlords of the remaining stores. The Court also held that the avoidance of the social and economic losses that would result from liquidation and the maximization of value would best be achieve outside of a bankruptcy. Re Clothing, at paras , 23. The proposed continuation of the Cumberland Group's NOI proceedings under the CCAA is consistent with the purposes of the CCAA. As discussed in the Saskin Affidavit and

19 9 the Fourth Report to Court by the Proposal Trustee dated September 30, 2016 (the "Fourth Report"): (a) the current stay of proceedings under the NOIs expires on October 10, 2016, which does not provide the Cumberland Group and the Proposal Trustee sufficient time to complete the Sales Process and address claims and other matters in the proposal proceedings to be able to formulate proposals to their creditors; (b) (c) if a viable proposal is not filed by the entities comprising the Cumberland Group by October 10, 2016, they will likely become bankrupt, which will be to the detriment of the creditors; the Sales Process, approved by the Court in the August 24th Order, has commenced and is ongoing and any restructuring plan to creditors of the Cumberland Group will depend on the outcome of the Sales Process; and (d) the conversion of the NOI proceedings into one CCAA proceeding will provide administrative efficiencies and additional time, and allow the Cumberland Group to streamline their restructuring efforts. Saskin Affidavit, at paras Fourth Report to Court of the Proposal Trustee (the "Fourth Report"), at para. 23 B. THE APPLICANTS ARE ENTITLED TO SEEK PROTECTION UNDER THE CCAA 1. The Applicants are insolvent 24. The CCAA applies to a "debtor company" or affiliated debtor companies where the total claims against the debtor or its affiliates exceeds five million dollars. Pursuant to Section 2 of the CCAA, a "debtor company" is defined as a company that is insolvent. CCAA, s. 2 & ss. 3(1).

20 -10-25, To determine if a company is insolvent for the purposes of this definition within the CCAA, reference is made to the definition of "insolvent person" under the BIA. The definition of "insolvent person" under the BIA is as follows: 2(1) [...] "insolvent person" means a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and (a) (b) (c) who is for any reason unable to meet his obligations as they generally become due, who has ceased paying his current obligations in the ordinary course of business as they generally become due, or the aggregate of whose property is not, at a fair valuation, sufficient, or if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due. 26. A CCAA court may also exercise its jurisdiction to extend protection by way of the stay of proceedings to a partnership related to an applicant where it is just and reasonable to do so. The courts have held that this relief is appropriate where the operations of a debtor company are so intertwined with those of a partner or limited partnership in question that not extending the stay would significantly impair the effectiveness of a stay in respect of the debtor company. Urbancorp Toronto Management Inc., Re, 2016 ONSC 3288 (Ont, S.C.J. [Commercial List]) at para. 43, Applicants' Book of Authorities, Tab "3", Priszm Income Fund, Re (2011), 75 C.B.R. (5th) 213 (Ont. S.C.J.) at paras , Applicants' Book of Authorities, Tab "4". 27. The Applicants have claims against them in the aggregate in excess of $5 million. Each of the Applicants is insolvent as it is subject to NOI proceedings and is unable to meet its obligations generally as they come due. Furthermore, the operations of the Applicants are highly intertwined such that not extending the stay to the partner or limited partnership would significantly impair the ability of the Cumberland Group to restructure. Saskin Affidavit, at para. 36. Saskin Affidavit, at paras

21 The Applicants' chief place of business is Ontario 28. Section 9(1) of the CCAA sets out the court has jurisdiction with respect to a CCAA application. It states that: 9(1) Any application under this Act may be made to the court that has jurisdiction in the province within which the head office or chief place of business of the company in Canada is situated, or, if the company has no place of business in Canada, in any province within which any assets of the company are situated. 29. Each of the Applicants are organized pursuant to the laws of Ontario and have their chief place of business in Toronto. Accordingly, the criteria of Subsection 9(1) of the CCAA are satisfied. C. COURT ORDERED CHARGES 1. Administration Charge 30. The Applicants are seeking a charge over all of the assets, property and undertakings of the Cumberland Group in an amount of $250,000 (the "Administration Charge") in order to secure the fees and disbursements of Fuller Landau in its capacity as the proposed Monitor, legal counsel to the proposed Monitor and counsel to the Cumberland Group. Saskin Affidavit, at para Section of the CCAA provides the Court with jurisdiction to grant an administration charge (1) On notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring that all or part of the property of a debtor company is subject to a security or charge in an amount that the court considers appropriate in respect of the fees and expenses of (a) the monitor, including the fees and expenses of any financial, legal or other experts engaged by the monitor in the performance of the monitor's duties; (b) any financial, legal or other experts engaged by the company for the purpose of proceedings under this Act; and (c) any financial, legal or other experts engaged by any other interested person if the court is satisfied that the security or charge is necessary for their effective participation in proceedings under this Act.

22 (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company. 32. In Canwest Publishing Inc., Pepall J. (as she was then) set out the following nonexhaustive list of factors to be considered in approving an administration charge: (a) (b) (c) (d) (e) the size and complexity of the business being restructured; the proposed role of the beneficiaries of the charge; whether there is unwarranted duplication of roles; whether the quantum of the proposed charge appears to be fair and reasonable; the position of the secured creditors likely to be affected by the charge; and the views of the Monitor. Canwest Publishing Inc., 2010 ONSC 222 (Ont. S.C.J. [Commercial List]) at para. 54, Applicants' Book of Authorities, Tab "5". 33. In the case at hand, the proposed Administration Charge is supported by the following factors: (a) (b) (c) (d) the nature of the Cumberland Group's business and operations requires the expertise, knowledge and continuing participation of the proposed beneficiaries of the Administration Charge in order to complete a successful restructuring; the professionals that are to be beneficiaries of the Administration Charge have contributed, and continue to contribute, to the restructuring of the Cumberland Group; the quantum of the proposed Administration Charge is modest and both fair and reasonable given the size and complexity of the Cumberland Group's business, and the Sales Process; and the Administration Charge was determined in consultation with Fuller Landau, and Fuller Landau supports the granting of the requested Administration Charge.

23 Saskin Affidavit, at para. 45 Fourth Report, at paras. 27 & Directors' Charge 34. The Applicants seek a director's charge (the "Directors' Charge") in the amount of $150,000 in favour of the sole director of each of Cumberland 2 GP, Cumberland 2 LP, Bosvest, Triangle and Residential. Saskin Affidavit, at para Under Section of the CCAA, the Court has express jurisdiction to grant a security charge over the Applicants' property in favour of any director or officer: (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring that all or part of the property of the company is subject to a security or charge in an amount that the court considers appropriate in favour of any director or officer of the company to indemnify the director or officer against obligations and liabilities that they may incur as a director or officer of the company after the commencement of proceedings under this Act. (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company. (3) The court may not make the order if in its opinion the company could obtain adequate indemnification insurance for the director or officer at a reasonable cost. (4) The court shall make an order declaring that the security or charge does not apply in respect of a specific obligation or liability incurred by a director or officer if in its opinion the obligation or liability was incurred as a result of the director's or officer's gross negligence or wilful misconduct or, in Quebec, the director's or officer's gross or intentional fault. 36. The factors to be considered in applying Section of the CCAA were set out in Canwest Global as follows: The purpose of such a charge is to keep the directors and officers in place during the restructuring by providing them with protections against liabilities they could incur during the restructuring: Re General Publishing Co. [(2003), 39 C.B.R. (4''') 216)]. Retaining the current directors and officers of the applicants would avoid destabilization and would assist in the restructuring. The proposed charge would enable the applicants to keep the experienced board of directors supported by experienced senior management. The proposed Monitor believes that the charge is required and reasonable in the circumstances and also observes that it will not cover all of the directors' and officers' liabilities in the worst case scenario. In all of these circumstances, I approved the request. Canwest Global Communications Corp., Re (2009), 59 C.B.R. (5th) 72 (Ont. S.C.J. [Commercial List]) at para. 48, Applicants' Book of Authorities, Tab "6".

24 In the case at hand, the beneficiary of the Directors' Charge has specialized knowledge and relationships with the Cumberland Group's suppliers, employees, major joint venture partners, and other stakeholders, as well as knowledge gained throughout the growth of the Urbancorp Group that cannot be easily replicated or easily replaced. Saskin Affidavit, at para Moreover, there is no existing D&O insurance policy in place that would cover directors and officers of the Cumberland Group. The Directors' Charge was determined in consultation with Fuller Landau, and Fuller Landau believes that the quantum of the Directors' Charge is reasonable. Saskin Affidavit, at para. 48. Fourth Report, at para. 28. PART IV - ORDER REQUESTED 39. For the foregoing reasons, the Applicants request that this Honourable Court issue an Order substantially in the form of the draft Initial Order attached at Tab "3" to the Application Record Returnable October 6, ALL OF WHICH IS RESPECTFULLY SUBMITTED this 4th day of October, BENNETT J S LLP

25 SCHEDULE "A" LIST OF AUTHORITIES 1. Re Clothing for Modern Times Ltd. (2011), 88 C.B.R. (5th) 329 (Ont. S.C.J. [Commercial List]) 2. Re Ted Leroy Trucking [Century Services] Ltd., 2010 SCC Urbancorp Toronto Management Inc., Re, 2016 ONSC 3288 (Ont. S.C.J. [Commercial List]) 4. Priszm Income Fund, Re (2011), 75 C.B.R. (5th) 213 (Ont. S.C.J.) 5. Canwest Publishing Inc., 2010 ONSC 222 (Ont. S.C.J. [Commercial List]) 6. Canwest Global Communications Corp., Re (2009), 59 C.B.R. (5th) 72 (Ont. S.C.J. [Commercial List])

26 SCHEDULE "B" RELEVANT STATUTES 1. Bankruptcy and Insolvency Act, R.S.C., C. B-3, as amended 2. "insolvent person" means a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and (a) who is for any reason unable to meet his obligations as they generally become due, (b) who has ceased paying his current obligations in the ordinary course of business as they generally become due, or (c) the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due; 2. Companies' Creditors Arrangement Act, R.S.C. 1985, c. B debtor company means any company that (a) is bankrupt or insolvent, (b) has committed an act of bankruptcy within the meaning of the Bankruptcy and Insolvency Act or is deemed insolvent within the meaning of the Winding-up and Restructuring Act, whether or not proceedings in respect of the company have been taken under either of those Acts, (c) has made an authorized assignment or against which a bankruptcy order has been made under the Bankruptcy and Insolvency Act, or (d) is in the course of being wound up under the Winding-up and Restructuring Act because the company is insolvent; 3 (1) This Act applies in respect of a debtor company or affiliated debtor companies if the total of claims against the debtor company or affiliated debtor companies, determined in accordance with section 20, is more than $5,000,000 or any other amount that is prescribed. 9(1) Any application under this Act may be made to the court that has jurisdiction in the province within which the head office or chief place of business of the company in Canada is situated, or, if the company has no place of business in Canada, in any province within which any assets of the company are situated (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring that all or part of the property of the company is subject to a security or charge in an amount that the court

27 2 considers appropriate in favour of any director or officer of the company to indemnify the director or officer against obligations and liabilities that they may incur as a director or officer of the company after the commencement of proceedings under this Act. (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company. (3) The court may not make the order if in its opinion the company could obtain adequate indemnification insurance for the director or officer at a reasonable cost. (4) The court shall make an order declaring that the security or charge does not apply in respect of a specific obligation or liability incurred by a director or officer if in its opinion the obligation or liability was incurred as a result of the director's or officer's gross negligence or wilful misconduct or, in Quebec, the director's or officer's gross or intentional fault (1) On notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring that all or part of the property of a debtor company is subject to a security or charge in an amount that the court considers appropriate in respect of the fees and expenses of (a) the monitor, including the fees and,?,xpenses of any financial, legal or other experts engaged by the monitor in the performance of the monitor's duties; (b) any financial, legal or other experts engaged by the company for the purpose of proceedings under this Act; and (c) any financial, legal or other experts engaged by any other interested person if the court is satisfied that the security or charge is necessary for their effective participation in proceedings under this Act. (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company Notwithstanding the Bankruptcy and Insolvency Act, (a) proceedings commenced under Part III of the Bankruptcy and Insolvency Act may be taken up and continued under this Act only if a proposal within the meaning of the Bankruptcy and Insolvency Act has not been filed under that Part; and (b) an application under this Act by a bankrupt may only be made with the consent of inspectors referred to in section 116 of the Bankruptcy and Insolvency Act but no application may be made under this Act by a bankrupt whose bankruptcy has resulted from (i) the operation of subsection 50.4(8) of the Bankruptcy and Insolvency Act, or (ii) the refusal or deemed refusal by the creditors or the court, or the annulment, of a proposal under the Bankruptcy and Insolvency Act.

28 Court File No.: CV CL IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, C. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF URBANCORP CUMBERLAND 2 GP INC., URBANCORP CUMBERLAND 2 L.P., BOSVEST INC., EDGE ON TRIANGLE PARK INC., AND EDGE RESIDENTIAL INC. Applicants ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) Proceeding commenced at Toronto FACTUM (Returnable October 6, 2015) BENNETT JONES LLP 3400 One First Canadian Place Toronto, ON M5X 1A4 Fax: S. Richard Orzy (LSUC#: ) Tel: Raj Sahni (LSUC#: 42942U) Tel: Lawyers for the Cumberland Group